Module 3: Contemporary Globalization Lesson 3.2: The World is NOT Flat

Module 3: Contemporary Globalization - Lesson 3.2: Thinking about Globalization

Defining Globalization

Globalization is characterized by the increasing interconnectedness of different parts of the world. This interconnectedness is driven by common processes of economic, environmental, political, and cultural change. Key aspects include the increased international mobility of goods, people, contracts (including financial claims), and thoughts (facts, ideas, and beliefs).

Dimensions of Globalization

Globalization manifests across various dimensions:

• Economic: Encompasses global finance and market economies, the rise of multinational corporations, international trade and business networks, new labor markets, and new development cooperation initiatives.

• Political: Involves issues such as human rights, international terrorism, warfare, and new security challenges.

• Democracy: Relates to good governance achieved through people's participation and respect for human rights.

• Ecological: Focuses on sustainable globalization, particularly the shared use and legislation concerning common resources like the biosphere, water, forests, earth, air, and atmosphere.

• Cultural: Leads to multicultural societies composed of diverse identities—local, political, gender, family, religious, national, individual, and social—and necessitates multicultural education for intercultural literacy (cit. Allahwerdi 2001).

Glocalization

Glocalization is a portmanteau combining "globalization" and "localization." It describes a product or service that is developed and distributed globally but is also specifically tailored to accommodate users or consumers in local markets. This means the product or service reflects both local and global considerations and may be conformed to local laws, customs, or consumer preferences. An example given is McDonald's adapting its menu with items like "McArabia™ Chicken" to suit regional tastes.

Three Basic Views of Globalization

There are three primary perspectives on globalization: Hyperglobalist, Skeptical, and Transformationalist.

The Hyperglobalist View

Hyperglobalists believe that the nation-state is losing its central role, undergoing a process of "denationalization." They argue that the autonomy and sovereignty of nation-states are dwindling or being significantly eroded. This view posits the rise of a single, integrated global economy that transcends and integrates the world's major economic regions, making increasing economic globalization inevitable. There is a rise of global institutions that share decision-making power with sovereign nations. Global finance and corporate capital exert decisive influence over the organization, location, and distribution of economic power and wealth. Hyperglobalists generally see globalization as beneficial, believing that its advantages will eventually trickle down to all parts of the world. This perspective questions the future of the welfare state and social democracy, envisioning a borderless world founded on the principles of neoliberalism.

What is Neoliberalism?

Neoliberalism is an economic and political ideology characterized by:

• The Rule of the Market: Emphasizes freedom for capital, goods, and services, with the market seen as self-regulating. This supports the "trickle down" notion of wealth distribution.

• Deunionization of Labor Forces: Policies that weaken labor unions.

• Removal of Impediments to Capital Mobility: Elimination of regulations, tariffs, trade barriers, and price barriers that might hinder the free movement of capital.

• Freedom from the State or Government: A belief that governmental intervention should be minimized.

• Reduced Public Expenditure: Cuts in government spending on social services such as healthcare and education.

• Deregulation: Allowing market forces to operate as a self-regulating mechanism without government oversight.

• Privatization: Transferring public enterprises (e.g., water, internet services) to private ownership.

• Shift to Individualism: Changing perceptions of public and community good towards individual responsibility and initiative.

The Skeptical View

Skeptics view globalization primarily as an ideological construct designed to give neoliberalist policies greater spatial dominance. They argue that there is nothing fundamentally new about the current operation of the world economy. While acknowledging an increase in the speed, scale, scope, and complexity of global exchange, skeptics contend that the degree of "intensity" and "interdependence" is often exaggerated. They maintain that the nation-state remains central, acting not as a passive victim but as a primary architect of global processes. Examples include the state's continued control over population flows and its role as a possessor of territory, upholding sovereignty. The emphasis on "footloose capital" and a new global capitalist order, as well as the decline of the welfare state, is considered overstated. Instead, skeptics argue that what is primarily occurring is regionalization, where integration is higher within regions than between them. The BRICS group (Brazil, Russia, India, China, and South Africa), and other regional trading blocs such as APEC, EU, COMESA, SAARC, and MERCOSUR, serve as evidence for this regional integration.

The Transformationalist View

Transformationalists accept that significant changes have occurred due to globalization but deny that these changes are inevitable or natural. They advocate for a careful consideration of evidence related to the spatial re-organization and re-articulation of power (economic, political, military, cultural). This view emphasizes thinking critically about how power is applied and exercised, including its modalities, instrumentalities, organization, and distribution. Transformationalists observe a blurring of boundaries, leading to a reconstitution and reconstruction of governance. They highlight that this process is highly uneven—it divides as it integrates, shrinking distances for some while increasing them for others. Sovereignty remains a feature of the system, with the nation-state still having a role in decision-making, though it now interacts within a multilayered system of governance, and its functions have been restructured accordingly.

Is the World Flat? Thomas L. Friedman's Perspective

Thomas L. Friedman, in his book "The World is Flat," argues that technological and political changes have created a more level playing field globally, enabling individuals and companies to collaborate and compete from anywhere. He identifies several "flattening factors":

1. "The Wall Came Down" ($11/9/89$): The fall of the Berlin Wall symbolized the opening up of Eastern Europe and the integration of new participants into the global economy.

2. Netscape Went Public ($8/9/95$): The commercialization of the internet and the World Wide Web provided a platform for global connectivity.

3. Workflow Software: The revolution in software allowed for seamless collaboration between applications and people.

4. Open-Sourcing: Collaborative development of software and content.

5. Outsourcing: Companies delegating specific tasks or functions to external providers, often in other countries.

6. Offshoring: Relocating entire manufacturing or service operations to another country.

7. Supply Chaining: The global integration of logistics and supply networks (e.g., Walmart).

8. Insourcing: Companies like UPS taking over internal logistics for other businesses.

9. Informing: Search engines and readily available information (e.g., Google).

10. "The Steroids": Technologies like VoIP, wireless internet, and advancements in personal access devices that amplify the other flattening factors.

Friedman suggests three convergences: the convergence of these ten flattening factors, the adaptation of businesses, and the entrance of $3$ billion new people onto the global economic playing field.

Globalization 1.0, 2.0, and 3.0

Friedman categorizes globalization into three eras:

• Globalization 1.0 (Pre-1800s): Characterized by countries and empires driving global integration through exploration and colonial expansion.

• Globalization 2.0 (Approximately 1800-2000): Driven by multinational corporations (MNCs) and technological advancements (railroads, steamships, telecommunications) that interconnected markets and industries on a global scale. Examples of dominant global brands include major Western and Japanese companies. Data suggests the dominance of U.S. companies in global sectors and industries, with a market capitalization exceeding 50 ext{%} of most industry totals across the S&P Global Broad Market Index. "The Big Nine" corporations—Google, Amazon, Apple, IBM, Facebook, Microsoft, Alibaba, Tencent, Baidu—are highlighted for their overwhelming influence in artificial intelligence and the digital economy.

• Globalization 3.0 (Post-2000): Characterized by individuals and small groups having the power to collaborate and compete globally, often facilitated by technology and social media. This era represents a significant shift from companies to individuals driving global interaction.

Why the World is NOT Flat: H.J. De Blij and Critics of Friedman

Critics like H.J. De Blij argue that the world is far from flat, describing it as a "rugged terrain." This perspective highlights significant obstacles to true global flattening, categorized into four main areas:

1. Too Sick

The "unflat world" still grapples with profound health and welfare inequalities:

• Extreme Poverty: In $1820$, 94 ext{%} of the world lived in extreme poverty; by $2015$, this figure had dropped to 10 ext{%}, yet it still represents a significant portion of humanity. Childhood mortality rates showed that in $1800$, 43 ext{%} of children died before age $5$; by $2015$, this had fallen to 4 ext{%}, still a tragic reality for millions. Children in unflat parts of the world remain significantly more likely to die from vaccine-preventable diseases.

• Unequal Access: Many lack access to electricity or clean water.

• Health and Economic Growth: As Friedman himself acknowledges, economic growth is challenging in places where 50 ext{%} of the population have malaria, half of the children are malnourished, or a third of mothers die of AIDS.

• Global Inequality in Living Conditions (2017 data):

  • Child Mortality Rate: Somalia faces a 12.7 ext{%} rate, vastly higher than Iceland's 0.21 ext{%}. The global average is 3.9 ext{%}.

  • Life Expectancy at Birth: Japan boasts $84.1$ years, while Sierra Leone has $52$ years. The global average is $72.2$ years.

  • Mean Years of Schooling: Germany has $14.1$ years, compared to Burkina Faso's $1.5$ years. The global average is $8.4$ years.

  • Average Income (GDP per capita): Qatar has $116,936$ (adjusted for price differences), significantly more than the Central African Republic's $661$. The global average is $15,469$.

2. Too Disempowered

The digital economy, a key driver of contemporary globalization, is unevenly developed, creating a "yawning gap" between under-connected and hyper-digitalized countries. In Least Developed Countries (LDCs), only $1$ in $5$ people use the internet. This raises questions about the location of data centers, the development of frontier technologies, and who benefits from digital data. Without addressing these divides, existing income inequalities will worsen. The United States and China overwhelmingly dominate the digital economy.

3. Too Frustrated

An unflat world implies global intimacy, which can be threatening, frustrating, and humiliating. Clashes arise between technological advancement and traditional religious or cultural values, leading to hopelessness, humility, discrimination, alienation, and increased potential for anger and violence. There is a massive reduction in trust. A $1997$ unclassified CIA report warned that while the global economy will create winners, "it will not lift all boats… [It will] spark conflicts at home and abroad… [Its] evolution will be rocky, marked by chronic financial volatility and a widening economic divide. [Those] left behind will face deepening economic stagnation, political instability and cultural alienation. They will foster political, ethnic, ideological and religious extremism, along with the violence that often accompanies it" (Quoted in Antonia Juhasz, 2006, p.298).

4. Too Many Toyotas (Natural Resource Constraint)

Beyond human constraints (sick, disempowered, frustrated), there are significant natural resource constraints. Today, over a third of the world's income is generated by about a tenth of the world's population in wealthy countries. As incomes rise in poorer nations, consumption will inevitably increase, further depleting natural resources to achieve more affluent lifestyles. The example of per capita oil consumption rates in the U.S. being double those in Western Europe illustrates this point. Despite abundant natural resources, war and social ills can keep countries like Liberia poor. Prosperous Qatar's natural gas reserves represent almost one-sixth of the world's total, highlighting the uneven distribution of resources and wealth.

The Power of Place

H.J. De Blij's "The Power of Place" argues that Earth, despite shrinking functional distances, remains a world of staggering situational differences. Place continues to be a powerful arbitrator due to the uneven distribution of natural resources and unequal opportunities. The world is not flat but a "rugged terrain" where climate, topography, natural hazards, pathogens, and other factors fundamentally shape economy, politics, language, culture, and power. Everyone is both blessed and burdened by the "baggage of place"—birthplace, mother tongue, belief systems, health conditions, environmental norms, and political circumstances. The same place presents different opportunities and challenges based on factors like gender. De Blij emphasizes that in the rush to embrace global "flattening," it is crucial to remember that the "point of entry continues to matter when it comes to opportunities in reach." This underscores the persistent geographical inequalities that globalization often fails to overcome.